Fractional ownership gains footing in vacation market

Although open for only 18 months, the 79-unit RiverWalk Resort at Loon Mountain is nearly two-thirds sold out, thanks in large part to an ownership model that allows people to buy a "fractional" share of a residence. (John Koziol/Union Leader Correspondent)

LINCOLN - Fractional ownership is an increasingly popular choice for buyers of luxury real estate, as evidenced by the success of the 79-unit RiverWalk Resort at Loon Mountain and deposits on $26 million worth of future sales at The Balsams.

Fractional ownership is similar to a timeshare in that owners gets to use the property for a given number of weeks per year, but different in that they also own real property, not just time.

At RiverWalk that property, which can be purchased in whole, seasonally or fractionally, includes studio condominiums starting at $60,000 and tops out with three-bedroom condos in the $200,000s.

Sales have been brisk, and the resort is poised in the next six months to roll out Phase II, which would add another 60 or so residential units and a conference center onto the RiverWalk building while also doubling the sizes of existing amenities, which include a working winery, a full spa and an Italian restaurant.

Dennis Ducharme, who co-owns RiverWalk as well as the Pollard Brook and South Mountain resorts in Lincoln, said fractional ownership "makes sense to me because I'm able to sell out a building pretty quick."

From the buyer's perspective it makes sense because they own a unit, and thus a vacation home but don't have the "burden" of maintaining it, Ducharme said.

"And I know this from experience," Ducharme said. "I had a home here, but I'm not here all the time, so why spend the money for an entire home?"

"With fractional ownership, you can pick the lifestyle that you like and come on up and enjoy the seasons that you want to enjoy. And when you roll into the resort, everything is prepared, and it's being serviced by the staff, so why would I want the burden of owning a home so that when I get to Lincoln I have to mow the lawn and stock the wood?"

RiverWalk, which will eventually have 170 residential units, is entirely "turnkey." If you can't or don't want to use any part of the nine weeks that you'd have as a fractional owner, the resort will even rent your unit and split the proceeds with you.

The Balsams approach

At The Balsams in Dixville Notch, a fractional ownership will provide 100 days of use, said Scott Tranchemontagne, a spokesman for the developer, Dixville Capital LLC.

What makes its model unique, he said, is that if the owner gives back 50 days, the resort will pay the homeowners association fees, and if the owner gives back 80 days, the resort will pay those fees in addition to property taxes.

"So you could actually own a unit at The Balsams, and if you're only going to be up there three weeks a year, you can eliminate all carrying costs. And that's the key difference between us and what anybody else is doing," said Tranchemontagne.

Although not a new idea, Tranchemontagne said, fractional ownership "allows a whole new generation of people to access this kind of property.

"Over the last 20 years, there's been a lot of development around ski areas where they've built individual homes or condos, and those are wonderful," he said. "But they come with really hefty price tags, and that prices a lot of people out of the market."

Currently, The Balsams is nearing finalization of the financing package for the $170 million Phase I, which entails the renovation of the Hampshire and Hale houses, reconstruction of the Dix House, construction of the Lake Gloriette House hotel and conference center, Nordic Baths and Spa, and an expanded ski area.

But even so, people continue to make refundable 5 percent deposits, and The Balsams is counting among its future owners not only baby boomers, but Gen-Xers too, Tranchemontagne said.

Back in Lincoln, Ducharme said RiverWalk is attracting buyers of all ages, many drawn by their love of the area and the numerous attractions nearby, including the White Mountain National Forest and the Loon Mountain ski resort, and their desire to optimize that outdoor time.

He said RiverWalk owners are "people who want to vacation in three generations, I call it 'togethering.'"

"Families are a lot closer nowadays than in the past, and when I was at a conference I talked about 'togethering' and to me it's incredible. It's very gratifying to do what I do as a career."

Ducharme concedes that he underestimated just how popular the RiverWalk lifestyle would be and when asked said he wasn't sure the fractional ownership model would succeed in other New Hampshire communities.

"I think Lincoln is unique, and it's all about location, location, location, and we say that in real estate all the time."